Free calculator
Debt yield calculator
Debt yield divides a property’s net operating income by the loan amount, giving the return the lender would earn on its money if it owned the property outright tomorrow. Unlike coverage it ignores the rate and the amortization, and unlike loan-to-value it ignores the appraisal, which is exactly why securitised and agency lenders size to it. This calculator returns the yield and the largest loan a given yield floor allows.
- 20,000+loan programs screened
- 5–8matches on a typical deal
- under an hourto the median first offer
- Zero upfrontto submit and compare offers
How is debt yield calculated?
Debt yield = Net operating income ÷ Loan amount
What does the calculation look like on a real deal?
| Input | Value |
|---|---|
| Net operating income | $215,000 |
| Loan amount | $2,000,000 |
| Debt-yield floor | 10.00% |
- Debt yield: $215,000 ÷ $2,000,000 = 10.75%.
- Largest loan a 10.00% floor allows: $215,000 ÷ 0.10 = $2,150,000.
Debt yield10.75%
At 10.75% the loan clears a 10.00% floor with about $150,000 of room. Neither the rate nor the amortization can change this figure — only more income or a smaller loan moves it.
How do you read the result?
Debt yield is the lender’s answer to the question “what if rates rise and values fall?”. Coverage improves when a lender offers a longer amortization and loan-to-value improves when an appraiser is generous; debt yield moves for neither, so it caps leverage in the markets and moments when the other two tests are most flattering. When it governs, the loan is being sized to income alone.
A yield below the floor has exactly two remedies: raise the income the lender will underwrite, or reduce the loan. Lengthening the amortization, buying down the rate or negotiating an interest-only period does nothing here, which surprises borrowers who have solved a coverage problem that way before.
Which lenders size to debt yield?
Securitised (CMBS) programs and the agency multifamily programs use it as a primary sizing test, and many banks and life companies run it alongside coverage and leverage. Private and bridge lenders lean on value and business plan instead, so on a transitional asset the yield may not govern at all. Ask each quoting lender which of the three tests they size to; the answer explains most differences between the term sheets.
How does debt yield relate to DSCR and LTV?
All three divide something by something, and on a stabilised property they usually agree on which loan is safe. They disagree at the edges: when rates are low, coverage allows more than yield does; when appraisals are running ahead of income, leverage allows more than yield does. The loan sizing calculator runs all three and shows which one binds.
What happens after you have the number?
A ratio tells you where the deal stands; it does not tell you which lender will like it. You describe the deal once — about five minutes — and it is screened against 20,000+ loan programs. Most deals return 5–8 matches, the median first offer arrives in under an hour, and there is Zero upfront; the fee is 0.50–1.00%, paid only at closing.
YieldStack is a commercial mortgage brokerage, not a lender. The rate, the leverage and the credit decision belong to the lenders competing for your deal; our job is making sure the right ones see it at the same time, so the terms you compare are real competition rather than one desk’s appetite.
Frequently Asked Questions
What is a good debt yield?
Each program publishes or negotiates its own floor, and it varies by property type and market. Rather than a fixed number, compare the floor on each quote you receive — it is a term-sheet item, and it tells you how much of your leverage is really available.
Why does the rate not change the debt yield?
Because the formula divides income by the loan balance, not by the payment. That is the point: the lender wants a measure of the loan’s safety that survives a refinance at a higher rate or a longer amortization.
Does debt yield use the same NOI as DSCR?
Yes, in principle — the lender’s underwritten net operating income. In practice the yield test is often run on a more conservative income with a management fee and reserves added, so expect the lender’s figure to be a little lower than yours.
Can I have a strong DSCR and still fail the debt-yield test?
Yes, and it is common when rates are low or the amortization is long: the payment is small, so coverage looks generous, while the loan balance is large relative to income. The yield test is designed to catch exactly that.
Is YieldStack a lender?
No. YieldStack is a commercial mortgage brokerage, not a lender. Every term sheet comes from a lender in the network and is subject to that lender's underwriting.
Does it cost anything to see terms?
No. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Is financing guaranteed?
No. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Where does YieldStack operate?
Nationwide. YieldStack arranges commercial real estate financing nationwide. Every deal is business-purpose commercial financing, and the broker fee is paid only at closing.
You have the number.Now get the quotes.
YieldStack is a commercial mortgage brokerage, not a lender.